The Securities and Exchange Board of India (Sebi) has broadened the scope of products, securities and services that can be offered by Online Bond Platform Providers (OBPPs), allowing them to offer products and securities regulated by the International Financial Services Centres Authority (IFSCA), as well as certain tax-specific bonds. Under the revised framework, OBPPs can offer products, securities or services regulated by financial sector regulators, including SEBI, the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), IFSCA and the Pension Fund Regulatory and Development Authority (PFRDA), according to the regulator's latest circular.

OBPPs can also offer bonds issued under Section 54EC of the Income Tax Act, 1961, or Section 85 of the Income-tax Act, 2025. India's green bonds find footing as stable 'greenium' underscores investor appetiteInsurers in India are showing significant interest in sovereign green bonds, aiding in the establishment of a substantial greenium.

With market confidence in the ability to absorb a larger supply, there’s a push for enhanced issuance of these bonds. Under the revised framework, OBPPs can continue to offer listed debt securities, listed municipal debt securities, listed securitised debt instruments, debt securities proposed to be listed through a public offering, listed Government Securities, State Development Loans, Treasury Bills and listed Sovereign Gold Bonds.

They can now also offer other products, securities or services regulated by financial sector regulators. IFSCA-regulated productsFor products, securities or services regulated by IFSCA, OBPPs will have to offer them in the manner specified for SEBI-registered stock brokers operating within GIFT-IFSC and comply with applicable requirements under the Foreign Exchange Management Act (FEMA), 1999.

This includes applicable Overseas Investment Rules and limits under the Liberalised Remittance Scheme (LRS). SEBI has also directed that such products, securities or services be clearly labelled as international or overseas instruments to prevent confusion with domestic debt securities.

These products may be offered either under a separate tab on the online bond platform or through another website or platform. They will be governed by the directions and stipulations of the respective financial sector regulator, while the OBPP will have to specify the grievance redressal mechanism on its platform.

Tax-saving bondsThe revised framework also permits OBPPs to offer bonds issued under Section 54EC of the Income Tax Act, 1961, or Section 85 of the Income-tax Act, 2025. SEBI has required platforms offering these bonds to provide a disclaimer stating that these are tax-specific instruments and that grievance redressal for these instruments does not lie with SEBI but with the issuer.